Europe Has More Potential

Future Technologies Require Better Links between Regions

Berlin (GER), June 2023 - In recent years, it has become apparent that the development of new technologies is unevenly distributed across European regions. The strong demand generated by the green and digital transition for these new technologies threatens to exacerbate this development even further. To better exploit the strengths and opportunities of different regions, an overview of the capabilities and potentials for the development of green and digital technologies is needed. Where can synergies be identified? Which regions can learn from and support each other? This new study answers these questions by showing which regions are key for the twin transition.

There are technological pioneers in Europe from Stockholm to Sicily. Stockholm stands out in the field of digitization. In the Swedish capital, technologies like 5G, internet of things, and broadband were well represented in new patents in recent years. In green technologies on the other hand, a particularly strong region is around Utrecht, in the Netherlands, which has strengths in greenhouse gas capture, bio fertilizers, and fuels from waste. Sicily also emerges as a digital leader in Europe. The region is particularly strong in cybersecurity, but cryptography is also a fast-growing field.

There is, however, strong national bias in the development of future technologies. The development of new green and digital technologies frequently involves inter-regional collaboration, but often ends at the national borders of European countries. In many cases, complementary technological capabilities are not linked between regions in different countries. As a result, much of the potential for developing future technologies is lost. This not only slows down the twin transition, but also worsens Europe's global economic competitiveness.

The vision is for technological cooperation to foster economic development across Europe. Those regions with the highest levels of economic development produced 80 percent of patents in green and digital technologies. Thus, richer regions have more potential for developing future technologies and better prospects for further economic development. This disparity threatens internal cohesion between EU regions. At the same time, it provides an opportunity: there are plenty of options for cooperation between leading and lagging regions all over Europe to develop technologies by combining complementary capabilities.

Both sides would benefit: Already patent-rich regions can diversify and exploit new economic sectors. However, regions with fewer patents can also diversify their economic activities and promote innovation to, ultimately, catch up on economic performance. For example, the economically lagging region of Andalucía exhibits perhaps obvious potential to collaborate in developing virtual and augmented reality technology with economically leading regions in Germany and France, but it also has potential with less economically developed regions in Portugal and Hungary. It currently collaborates only with other Spanish regions.

There is substantial untapped potential in inter-regional collaboration when it comes to the development of twin transition technologies across European regions of varying economic advancement. For Europe, this means that the potential arising from cross-border technology cooperation can be used both to accelerate the dual transformation and to strengthen European cohesion simultaneously.